State-Run Retirement Plan For Private Sector Employees

The Senate Budget and Taxation Committee subcommittee on Pensions heard, last week, legislation that would create a state-run retirement savings plan for private sector employees whose employers do not offer retirement plans.

The bill, SB 921, would establish the Maryland Secure Choice Retirement Savings Trust and Program. Employers with at least 5 employees who don’t offer a retirement plan would be required to make the plan available to employees through payroll deductions, unless the employee opts out.

The Maryland Chamber opposes the bill. The legislation would impose administrative burdens on impacted employers that would be required to set up payroll reductions, enroll employees and collect forms from employees who opt out. In addition, similar retirement savings plans are already available from banks, brokers and other institutions. There is no evidence that a state-run retirement plan can be provided more cheaply than plans currently available in the marketplace.

Similar legislation was amended into a study bill last year that passed the Senate but failed to pass in the House of Delegates. There will be a hearing, next week, in the House Economic Matters. For more information, contact Deriece Pate Bennett at dpatebennett@mdchamber.org.